ABSTRACT
The study focused on the drivers of cubed seasoning consumption in Abia State, Nigeria. The specific objectives were to; determine the influence of consumer income on the purchase of cubed seasoning; determine the influence of price on the purchase of cubed seasoning; examine the influence of Taste on the purchase of cubed seasoning; examine the effect of cubed seasoning quality on purchase of cubed seasoning; examine influence of advertising on purchase of cubed seasoning; and rank the drivers influencing consumption of cubed seasoning mostly in Abia State, Nigeria. The study adopted a cross sectional survey design. A population of study is unknown, so the proportional method was adopted. A sample size of 244 was determined for this study. A primary source of data collection was used in the distribution of questionnaire to the respondents. Hypotheses were tested using the Multiple Regression Model aided by SPSS (Version 20). Results from the study revealed that quality of cubed seasoning was ranked 1st as the most significant driver of consumption of cubed seasoning in Abia State., followed by Taste which ranked 2nd. The result revealed that income has positive coefficient and significant effect on consumption of cubed seasoning; price of cubed seasoning has negative coefficient and significant effect on consumption of cubed seasoning; taste has positive coefficient and significant effect on consumption of seasoning cubed. Quality of has positive coefficient and significant effect on consumption of cubed seasoning. However a unit increase in the cost of adverting of cubed seasoning will insignificantly drives consumption of cubed seasoning in the study area. Hence, advertising has no significant influence in the purchase of cubed seasoning in Abia State. A major recommendation from the study (among others) is that there is need for marketers of cubed seasoning to continue repositioning the product by creating unique experiences for consumers to ensure positive perception towards cubed seasonings consumption.
TABLE OF CONTENTS
Page
Cover Page i
Title Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Table of Contents vii
List of Tables x
List of Figures xi
Abstract xii
CHAPTER 1
INTRODUCTION
1.1 Background of Study 1
1.2 Statement of Problem 3
1.3 Objective of the Study 4
1.4 Research Questions 5
1.5 Hypotheses of the Study 5
1.6 Significance of the Study 6
1.7 Scope of the Study 6
1.8 Limitations 7
1.9 Operational Definition of Terms 7
CHAPTER 2
REVIEW OF RELATED LITERATURE
2.1 The Concept of Consumption 8
2.1.1 Consumer income 11
2.1.1 The concept of price 13
2.1.3 The concept of taste/preference 18
2.1.4 Product quality 19
2.1.5 Concept of advertising 20
2.1.6 Relationship between income, price and taste 24
2.1.7 Consumer purchase behaviour 27
2.2 Theoretical Framework 29
2.2.1 Absolute income hypothesis 29
2.2.2 Relative income hypothesis 31
2.2.3 Permanent income hypothesis 32
2.2.4 Life cycle hypothesis 34
2.2.5 The theoretical econometrics of consumption 35
2.3 Review of Empirical Studies 38
2.4 Summary and Gap in the Literature 42
CHAPTER 3
RESEARCH METHODOLOGY
3.1 Research Design 44
3.2 Population of Study 44
3.3 Sample size and Sampling design 45
3.3.1 Sample Size determination 45
3.3.2 Sampling techniques 45
3.3.3 Instrument for data collection 46
3.4 Source of Data Collection 46
3.5 Psychometric Properties 46
3.5.1 Validation of instrument 46
3.5.2 Reliability of instrument 47
3.6 Analytical Techniques 47
3.7 Model Specification 48
CHAPTER 4
PRESENTATION, ANALYSIS, INTERPRETATION OF DATA AND DISCUSSION
4.1 Introduction 49
4.2 Presentation and Interpretation of Data 49
4.3 Ranking of Divers of Consumption 49
4.4 Test of Hypothesis 55
4.4.1 Hypothesis analysis 56
4.5 Discussion of Findings 58
CHAPTER 5
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 60
5.2 Conclusion 61
5.3 Recommendations 62
5.4 Contribution to knowledge 63
References 64
Appendices 67
LIST OF TABLES
1. Sample size 45
2. Reliability test 47
3. Distribution of returned copies of the questionnaire 49
4. Distribution of respondents according to age 50
5. Distribution of monthly house allowance of consumers based on income 50
6. Influence of consumer’s income the purchase of cubed seasoning 51
7. Influence of price on the purchase of cubed seasoning 51
8. Effect of taste on the purchase of cubed seasoning 52
9. Effect of quality on purchase of cubed seasoning 52
10. Influence of advertising on purchase o cubed seasoning 53
11. Ranking of the drivers of consumption of cubed seasoning 54
12. Model summary of multiple regression result of the coefficients
of determination of the independent variables 55
14. ANOVAa of the variations in the dependent and independent variables 55
15. Coefficientsa of the independent variables on the dependent variable 55
LIST OF FIGURES
Page
1: Price – Demand relationship 14
2: Schematic framework of the proposed model 29
3: The Theoretical concept of cubed seasoning consumption 37
4: Heuristic framework 63
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF STUDY
Drivers are the strong and powerful variables that have the strongest influence in changing situation or behavior. Drivers are the deciders of request for the purchase a product. The influences can be positive, negative or partial (Osuala, 2015).Cubed seasoning is a consumer packaged goods. It is among the Fast Moving Consumer Goods (FMCG) products line. FMCG are goods that are sold very quickly and at low prices (Malhotra, 2014). Although the profit margin made on FMCG products is relatively small, the products are sold in large quantities. As the fast moving consumer goods are low priced with many brands, companies are involved in the manufacturing and production of categories of similar products which makes them really difficult to be positioned in the minds of the consumers (Malhotra, 2014). Cubed seasoning indeed is a low priced product with high sales volume, attracting minimal profits for the sellers. The high level of competition in the market makes it hard to increase the profit margin. So marketers are at war to maximize profit. In a time of recession like we have in Nigeria, consumers tend to save money by buying cheaper brands as compared to expensive goods.
Cube seasoning is a necessary ingredient in food preparation. It is made with active ingredients like crayfish, stockfish, beef, chicken, salt, classic spices etc. As a consequence for good flavor and nutritious meal, it is one of the steps in the processes in food preparation which is dynamic from culture to culture. According to Frank and Bernanke (2001); consumption is the demand (spending) by families on physical products and services namely; clothing, food items, entertainment, health services and acquisition of assets among others. Anyanwu (2013) gave consumption definition as the complete demand for all consumer goods and services. The consumption function shows the relationship that exists between consumption and the driver(s). Osuala, (2015) revealed that, the micro-economic theory states that the demand of a particular commodity depends on its price, the price of other commodities, consumer’s income and taste, all things being equal. In determining the Drivers of cubed seasoning consumption in Nigeria, Monye, (2014) in Financial Guardian report, identified Price, Income, Taste / Preference as major drivers. This implies that the major drivers of consumption of a commodity are Income, Price, and Taste of the consumer and are adopted as independent variables for this study. In econometrics, there are other factors whose influence may not be explicitly included as major drivers but are considered as random variables.
In Nigeria, the use of cubed seasoning has undergone an evolutionary change over recent years. One of the reasons for introducing cubed seasonings in the market is to improve food taste and ensure quality food that meets the need of the consumers. Before the introduction of food seasoning in cubes, households made use of indigenous seasoning that were notable in various cultures. The Igbos use Ogiri, Yoruba; Iru and Hausa; Dadawa. Food seasoning is a common prime factor of every kitchen in Abia State. An ideal meal is usually not complete without the inclusion of cubed seasoning. Presently there are very high demand of cubed seasoning in Abia State, Nigeria due to its commercial value and increasing ceremonies and festivities. The cubed seasoning market has remained attractive for producers and there is high demand by the consumers. So many more brands are entering the market on regular basis.
As reported in Financial Guardian by Monye (2014), within the past six years, over six new seasonings, brands have entered the market. This study discovered that 8 out of 10 households use one brand of cubed seasoning or the other. He posited that, cubed seasoning market is an oligopoly and the product is inelastic in demand. It is dominated by few producers with varieties in different brand names but similar prices. The estimated worth of cubed seasoning in Nigeria is more than N14.7 trillion in value and the estimated volume is about 5,475 tons per annum, BGL report (2013).The traditional open markets, street shops, supermarkets and hypermarkets are the major sources of distribution of cubed seasoning (Owoeye, 2018).
The seasoning market is growing daily with new products making entry into the market (Owoeye, (2018). He advised that leading brands must double their efforts or they could lose positions to the new entrants like Onga, Mamador, Davon and Tasty King. The study on buying decision drivers by (Monye, 2014) stated that Income, Price and Taste are factors that determine market leadership in the culinary food sector. In econometrics as stated by Osuala (2015), Income, Price and Taste are the drivers of consumption. This claims motivated the study, believing that there are other major determinants of food consumption that influences purchase decision. So this study looked into the inclusion of Quality and Advertising to Income, Price and Taste as major drivers of consumption of cubed seasoning.
1.2 STATEMENT OF THE PROBLEM
One of the reasons organizations introduced cubed seasoning in the Nigerian market is to improve food taste and ensure quality food that meets the need of the consumers (Monye, 2014; Owoeye, 2019). Due to high demand of the product by consumers, cubed seasonings producers/marketers are in a hot race for leadership of the market to attract high volume demand and profitability (Monye, 2014, Salau, 2014; Ekwujuru, 2014). However, they are not aware of the strength of the variables like income, price, taste, quality and advertising; and how the strength of the variables influence cubed seasoning consumption. So the common business problem is that some of the Managers in Fast Moving Consumer Good (FMCG) business pursue sales targets and profits by continual increment in prices of products regardless of the size of income of the consumers. Managers are nonchalant of alternative condiments in the market and they also lack information on the intervening variables and the influence of moderating variables in the study.
Consumers are craving for a kind of cooking condiments that can be used in different stages of cooking process to give them satisfaction but the managers are yet to create grouping in cubed seasoning market to help in class distinction. The Taste of the consumers changes regularly. In view of the continual increase in demand according to Owoeye, (2018), the competition amongst players in the Nigerian seasoning market is becoming more interesting (Salau, 2014; Owoeye, 2018). The specific problem is to investigate some of the causes of this ever increasing demand for cubed seasoning and ascertain their effects. These would enable managers to understand the market environment well and the consumers will benefit from the value of their money.
1.3 OBJECTIVES OF THE STUDY
The major objective of this study is to determine the specific actors that drive the consumption of cubed seasoning in Abia State, Nigeria. The specific objectives for the study are to;
i. determine the extent to which income influences consumers’ purchase of cubed seasoning;
ii. determine the extent to which price influences the purchase of cubed seasoning;
iii. ascertain the effect of taste in the purchase of cubed seasoning;
iv. examine the effect of quality on purchase of cubed seasoning;
v. examine the influence of advertising on purchase of cubed seasoning;
vi. to rank the drivers influencing consumption of cubed seasoning mostly in Abia State, Nigeria.
1.4 RESEARCH QUESTIONS
The following research questions were asked to provide answers for the study.
i. To what extent does Income influence the consumer purchase of cubed seasoning?
ii. To what extent does Price influence the purchase of cubed seasoning consumption?
iii. What is the effect of Taste on consumption of cubed seasoning?
iv. What is the effect of quality on purchase of cubed seasoning?
v. To what extent does advertising influence purchase of cubed seasoning?
vi. Which of the drivers (income, price, taste, quality, advertising) influence consumption of cubed seasoning mostly in Abia State.
1.5 HYPOTHESES OF THE STUDY
The following null hypotheses were postulated:
Ho1: There is no significant influence of Income on the consumption of cubed seasoning.
Ho2: There is no significant effect of price on the consumption of cubed seasoning.
Ho3: There is no significant effect of Taste on the consumption of cubed seasoning.
Ho4: Quality has no significant influence on purchase of cubed seasoning.
Ho5: Advertising has no significant influence on purchase of cubed seasoning.
Ho6: None of the variables influences the purchase of cubed seasoning.
1.6 SIGNIFICANCE OF THE STUDY
This study is beneficial to the producers, marketers and consumers of cubed seasoning because it reveals the major prevailing factors that influence the demand of the cubed seasoning in the market. It will also be beneficial to the managers and organizations by mapped out strategies to achieve planned objectives.
The study will benefits managers because it has statistically explain the proportion of variations in consumption due to a unit change in price, income and taste of consumers, quality and advertising for satisfaction and the achievement of consumer sovereignty; and management decisions.
To the consumers of cubed seasoning, this study will help them to improve food taste and provide nutritious meals. Organizations in cubed seasonings business will adjust their operations where necessary to enable them utilize the knowledge from this study for organizational growth, Academic researchers and institutions may use this study to form a base for further studies by adding to the existing literature review. The society will benefit also because this study will expose the marketing weaknesses and opportunities in the purchase of cubed seasoning, which when improved upon will bring social development and good health to the society. The various food related agencies in government, as policy makers will use the findings in this work to improve existing polices in the operations of Fast Moving Consumer Goods (FMCG) sector.
Finally, this study serves as a measure to complete my academic work in my department.
1.7 SCOPE OF THE STUDY
The study focused on determinants of cubed seasoning consumption in Abia State, Nigeria. The subject scope covered the influence of consumers’ income, price of cubed seasoning, taste of cubed seasoning, cubed seasoning quality and advertising effect on consumption of cubed seasoning. The content also ranked the drivers influencing consumption of cubed seasoning mostly in Abia State, Nigeria. The geographical area of coverage is the Aba ,Abia State, Nigeria. Three zones were used in the study namely; Abayi, Eziukwu and Umungasi zones. The unit of analysis is women of adult age who prepare food. The variables tested were Income of consumers, Price of product and Taste/preference of consumers, Quality of product and Advertising effects.
1.8 LIMITATIONS
Some limitations in this study are acknowledged. Firstly, women were of adult age , it would have been of interest interviewing minors. Secondly, data were collected from a specific geographical area, Aba, Abia State. Other major towns in Abia State would have added to the generalized ability. Thirdly, the sample size would have been more if larger groups were accessed. Fourthly, the sampling method was based on judgmental and convenience sampling procedure in the data collection, so I recognized the two inherent methodological shortcomings in this study.
1.9 OPERATIONAL DEFINITION OF TERMS
Consumption: The total demand of cubed seasoning.
Drivers: Deciders for consumption of cubed seasoning.
Cubed Seasoning: These include all kinds of culinary goods for food preparation. e.g Maggi, Knorr, Royco, Doyin, Mr Cheff, etc.
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